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IIM-A works on plan for self-funding
Joydeep Ray in Ahmedabad | January 23, 2004 08:37 IST
The Indian Institute of Management, Ahmedabad, is working on a plan that will help it become financially self-sufficient.
This will enable the institute to run the show minus the annual funding -- and interference -- from the human resources development ministry.
The move comes at a time when the ministry is likely to slash annual allocations to the top three B-schools -- the Indian Institutes of Management in Ahmedabad, Bangalore and Calcutta.
IIM-A is working on a five-year plan initially, and the term may be extended by another five years once the strategy starts paying dividends.
It is expected that in the next few months, the board of governors will also take a decision about receiving funds from the ministry -- by when the proposed model is expected to be finalised.
IIM-A director Bakul Dholakia, who was vocal during the common admission test paper leak controversy, did not make any comment on this issue.
The chairman of the board of governors of IIM-A, Narayana N R Murthy, was not available for comment in spite of attempts made by Business Standard.
However, in a written statement faxed from Bangalore, Murthy's office said following the ministry's request to slash the Budgetary allocation to Rs 17 crore (Rs 170 million) from Rs 32 crore (Rs 320 million), the board felt such funds should first be channeled to improve primary education in the country.
"Hence, the board has initiated an exercise in scenario planning on managing the institute for the next five years with minimal burden on the ministry. The exercise is still a work in progress and no decision has been taken," said the statement.
"Once the financial viability of such a model, with minimal demand on the ministry's financial resources is established, we will take a decision on this issue," the statement added.
On the details of the exercise, the statement said, "As it is a board decision and still being worked out, the chairman is not in a position to divulge further details."
Sources close to the institute, however, said IIM-A, which generated a good amount of revenue from its various executive programmes, might introduce more such new programmes to generate funds.
It has already initiated work on an executive management programme for students with five years working experience from 2005-06, which will also contribute significantly to its income.
"All this will bring in much funds to the institute, helping it stand on its own feet," said the source.
IIM-A is quite well-to-do with a corpus of around Rs 98 crore (Rs 980 million). Interestingly, the institute recently decided to seek Rs 2.7 crore (Rs 27 million) from the government for construction work at its upcoming new campus at Vastrapur in Ahmedabad.
The new campus is being developed at a cost of Rs 40 crore (Rs 400 million) and is expected to be operational from June 2005.
The board's decision to seek funds for the new campus is seen as its attempt to patch-up with the ministry, with which it has been at loggerheads since the leak of test paper in mid-November last year.